Is Your Bookkeeper in Over their Head?

​We regularly have business owners come to us asking things like, “How can I tell if my bookkeeper is doing a good job?” and “Is my bookkeeper missing anything?” and “Does my bookkeeper have enough experience to do what we need done?”

​The reality is that you can’t count on your bookkeeper being able to tell you when they’re in over their head, not because they’re dishonest, but because most times they can’t tell themselves. Simply put – you don’t know what you don’t know! 

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Now, there are certainly instances where a bookkeeper does have a sense that their role is asking for more than they know how to contribute but they’re just too embarrassed to admit it. However, if they are being managed effectively, they should feel like they can bring these types of concerns up with their manager and get the support and resources they need to grow professionally.

You can have a hardworking, dedicated bookkeeper with high integrity that’s eager to learn, but if they don’t have the right kind of experience, they can miss things that they don’t even know they should be thinking about or doing. And, as a business owner or leader, if you don’t know what to look for or what kinds of questions to ask, you won’t be able to tell if your bookkeeper is in over their head either!

So, to help you out, we’re going to discuss what kind of red flags to be on the lookout for as well as what your options are if you discover that your bookkeeper lacks the skillset needed to succeed in their role.

Recognizing The Red Flags
There will usually be warning signs when your bookkeeper is in over their head, which may include:

• Missed deadlines
• Reporting problems
• Journal entry errors
• Inconsistent reconciliations
• Unexpected cash flow shortfalls
• Frequent expense reclassifications
• Revenue recognition inconsistencies
• Late payments to vendors or suppliers
• Inefficiencies in daily activities
• Poor planning around close periods
• Incomplete deliverables
• Using a patchwork solution of systems and programs
• Underutilization of the capabilities within financial technology and tools
• Resistance to exploring new solutions
• A lack of proactive communication
• An unwillingness or inability to answer questions when they arise
• Exhibiting symptoms of stress and burnout
• Lacking awareness around how long financial records should be kept
• Facing tax penalties or fines due to misreported income
• Being selected for an IRS audit

Evaluating Your Options
When your bookkeeper’s skills aren’t up to the level needed for the role, you have two options. You can either upskill them so their ability matches the company’s needs, or you can find someone more experienced for the role. An outsourced accountant can play an instrumental part in pursuing either of these strategies!

Upskilling
When you’re looking to upskill your bookkeeper, a consulting accountant can come in and teach your bookkeeper the things that they need to round out their skillset. Here an outsourced accountant will help them to identify and fix past errors and create better accounting policies and procedures to follow moving forward to keep them on the right track. Used this way, an outsourced accountant can come in for a short period of time to educate and mentor your bookkeeper, giving them the skills they need to oversee the company’s finances better in the future.

Leaning on More Experience
When you’re looking for someone more experienced, an outsourced accountant can offer the experience level you need for the role. This can either be done in a way that supplements your existing bookkeeper or replaces them. In some cases, a company’s bookkeeper is a wonderful asset to the organization, but they are just not equipped to handle a full-cycle accounting role. A fractional accountant can come in on a part-time basis to handle the functions past where the bookkeeper’s role ends to ensure the company’s full breadth of financial needs are handled effectively. In other instances, a company may just have needs that are too sophisticated for a traditional bookkeeper role, necessitating an upgrade to an accounting role instead. Either way, an outsourced accountant can be an extremely valuable asset for the business to utilize. 

The Keys to a Successful Fractional Accounting Engagement

When you need an outsourced accountant to lend deeper or broader accounting expertise to your organization, we can help! Our team of experienced fractional bookkeepers and accountants can upskill your staff or augment their capabilities with increased knowledge of GAAP to clean up your books and keep business operations running smoothly. We provide part-time accountants, interim accountants, short-term accountants, and project accountants to fit your organization’s specific needs. Contact us to find out more today!